REDD.L WACC - Weighted Average Cost of Capital
The WACC of Redde Northgate PLC (REDD.L) is 7.4%.
| Range | Selected | |
| Cost of equity | 8.9% - 12.2% | 10.55% |
| Tax rate | 18.2% - 22.4% | 20.3% |
| Cost of debt | 4.0% - 4.5% | 4.25% |
| WACC | 6.5% - 8.4% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.7% | 4.2% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.87 | 1.06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.9% | 12.2% |
| Tax rate | 18.2% | 22.4% |
| Debt/Equity ratio | 0.78 | 0.78 |
| Cost of debt | 4.0% | 4.5% |
| After-tax WACC | 6.5% | 8.4% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| REDD.L | Redde Northgate PLC | 0.78 | 1.03 | 0.64 |
| ALADA.PA | Ada SA | 0.52 | 0.4 | 0.28 |
| ALQ.MC | Alquiber Quality SA | 3.23 | 0.18 | 0.05 |
| BEYAZ.IS | Beyaz Filo Oto Kiralama AS | 0.01 | 2 | 1.98 |
| LNSX.DE | Sixt Leasing SE | 2.99 | 0.18 | 0.05 |
| METRO.IS | Metro Ticari ve Mali Yatirimlar Holding AS | 0 | 0.67 | 0.67 |
| NTG.CO | NTG Nordic Transport Group AS | 0.43 | 0.37 | 0.28 |
| OTOEL.AT | Autohellas SA | 0.8 | 0.82 | 0.5 |
| R | Ryder System Inc | 1.17 | 1.1 | 0.57 |
| UHAL | Amerco | 0.6 | 0.65 | 0.44 |
| Low | High | |
| Unlevered beta | 0.38 | 0.53 |
| Relevered beta | 0.81 | 1.09 |
| Adjusted relevered beta | 0.87 | 1.06 |
REDD.L's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for REDD.L:
cost_of_equity (10.55%) = risk_free_rate (3.95%) + equity_risk_premium (6.50%) * adjusted_beta (0.87) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.